Viebeg Medical Supplies using technology to predict medical supplies demand in Kenya

Having worked with some of the biggest medical equipment and supplies distributors in East Africa, Alex Musyoka, co-founder and chief commercial officer of Viebeg Medical Supplies says he knew firsthand the challenges clinics and hospitals in remote areas go through when sourcing for the much-needed medical supplies.

“I worked in the medical industry for 15 years and got to see a lot of problems, one of them being clinics and hospitals not having sufficient medical supplies when needed, something that cannot be achieved by approximating what and when they should have them,” he says.

Musyoka says this problem has to be tackled by technology to predict and optimise procurement of medical equipment and supplies in health clinics.

For him, the fear of failure was big when he and his co-founder mooted the idea of launching Viebeg Medical Supplies.

“This fear pushed me even harder to achieve what people thought was not achievable. That fear is still there but as they say ‘if your vision is too small that you don’t get frightened when you think about it then it’s not a vision,” he says.

Fundraising

Musyoka says he was lucky enough to meet his co-founder Mr Tobias Reiter with whom they raised $50,000 for initial stock and other running costs but when they realised the business was not moving as planned, Tobias borrowed $200,000 from his parents to get the startup off the ground.

“After incorporating technology, we started approaching impact investors because being a startup and the impact we were creating, we wanted investors that would suit our business model,” recalls Alex.

However, this fundraising took a lot of time because at times, investors felt Viebeg Medical Supplies didn’t fit their model.

“We made over 50 investment calls and only one came through. Raising funds was not an easy task but that is when things started going for us,” he adds.

Musyoka says as per their model, they classified capital into three aspects. “There’s the financial bit, customers/clients and suppliers.

“Capital is only mentioned in terms of money but we have some clients who supported us at the very beginning by giving us payments in advance because they lacked supplies and didn’t know where to get them. We had our margins and we were good to go,” he explains.

Mosyoka says he also had a number of suppliers he had cultivated trust with who gave him the opportunity to take their products, sell upfront and pay after a period of time.

Viebeg Medical is a health data driven procurement company that de-risks and optimises procurement of medical equipment through supplies using a health demand simulation model.

“We collect demographic and geographical data, analyse to determine which equipment or drugs are needed at a certain location, depending on the disease patterns.”

And with the same data, they connect clients to grants or institutions offering impact investment in the continent, advise them which equipment to source, and return on investment, what population they would serve and what kind of impact they will bring into the society.

“The other bit is demand prediction where we have our stocks and we build models that predict demand within a given period time - compared to other suppliers who procure on gut feeling and what’s more profitable without using data,” he adds.

“We ensure that at whatever given time a customer requests for certain product, we have it in stock, able to deliver and that supplies on transit would arrive right before the other shipment runs out.”

With their online platform, customers can go log in, get details of what they want and be issued with a proforma invoice. The platform collects data on the most requested products and Viebeg Medical Supplies actualise their stocks depending on customer requirements.

The last which is very important is financing of medical equipment purchase.

“Many clinics would want to have certain equipment so we connect them to financial institutions, we supply and guarantee the equipment we supply.”

Musyoka says that Viebeg grew exponentially from their first to second year with 200 per cent increase in revenue.

“We have had an average growth of about 80 per cent in revenue every year. In 2022, we made around $1.7 million and in the first two quarters of 2023, we have achieved $1.2 million in revenues and targeting $3 million this year,” he reveals.

In terms of client acquisitions, Viebeg has grown at a rate of 60 per cent every year and currently serves 650 hospitals and clinics and pharmacies in Rwanda, Kenya and eastern DRC.

“We currently have 34 employees, 30 casuals, 600 plus on delivery on demand deliveries met and supplied over 620,000 products up to now.”

He says Covid-19 pandemic came as a surprise and admits that things were not good at that time while the company was still so young.

“All of a sudden, we could not ship in products. Some people would say that being a medical company, we benefited from the pandemic, but it was the opposite. It hit us hard,” he says.

At some point, they ordered infrared thermometers and due to huge demand, suppliers in China hiked prices and before the consignment arrived, some people had already procured cheaper infrared thermometers, which cost them money.

“We again thought of ordering face masks and gloves but then all of a sudden everyone starting using all manner of face masks.”

In terms of logistics, shipping in supplies took up to five to six months to arrive.

Apart from the Covid-19 disruptions, the biggest challenge for him and his business partner had been to contend with building a team because according to him, the biggest part and chunk of setting up a successful business is having a good team.

“Funding was also a challenge and not to forget having clients to accept you and also growing the new markets because when spreading to new markets considering that this is Africa, what is theory is not what is practical.”

Alex decries that taxation is still too high leading to medical supplies being costly.

Logistics partnerships

He explains that Viebeg sees potential partnerships with companies for drone delivery of drugs and optimizes to see which routes best fit certain deliveries.

“We are getting to understand and figure out how to handle distribution of medical supplies but at the moment, we are managing it through third parties but it is still a challenge,” he adds.

Learnings and plans to conquer East Africa

Alex says that the very first thing he has learnt even when employed is discipline and work and going that extra mile even without supervision.

“As an entrepreneur, at a certain time point in time, we tend to relax thinking all well but for me, there’s much more than that. I do not stick on playing small as there is no fun in playing small, push yourself to higher limits,” he advises.

Alex says when they recently fundraised, they were already planning to strengthen their existing branches.

“In the next three years, we aim to take over the East African market. What we are doing is cash intensive, but with data analytics models we are building and partnerships with governments, we want to ensure we have the right statistics to help us predict demand,” he concludes.

For now, they are looking at Uganda, Tanzania and Burundi before even thinking of heading to West Africa market.